My Donut Business.com

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So you interested in making easy money, who isn't? As you know there are four of us in this little doughnut venture that we have been doing or thinking about for almost a year now. It was conceived in Rehoboth Beach, after discussing some projects we wanted to get into in the future. The four of us have two or three meetings every year discussing the details of what we are doing. We look to find new projects, assess what we have done in the past and looke for what we're going to do in the future. Each of us come from a different background, and each of us bring something unique to the table, which makes it a very nice business marriage.

Like anything in business,the donut business is not a get rich quick scheme. Like everything else in life, it takes work and dedication. As those who manage their time and learn from their mistakes that will be successful. You've heard the old adage when you first learned to ride a bicycle, when you fall, you get up and try again until you learn how to do it correctly. This is what happens in business. Myself, I've had a lot of failures. I have made many many mistakes. I try to learn from my mistakes and I never give up. There is nothing better than the school of hard knocks.

There's a lot to do from the inception of your idea to the point when you are making money. Many of you are tired of your jobs, afraid of what is around the corner And overall just burnouts on everything. The best advice I can give you before you start to make the so-called easy money is try to get your debts paid off, the bad debt. This is something that will never go away and will hunt you the rest of your life. Did you knows that bill collectors can come after you Pretty much the rest of your life, as long as it has not been paid? The debt just gets sold over and over and over and over and over. It may have been erased from your credit score, and I'm not telling you to pay it, but it still can haunt you. Please do not go into debt, especially on frivolous things that you do not need. Using debt wisely, such as to finance a fledgling business, can be a wise thing if done correctly. It is not wise however, to use debt to finance things such as vacations, clothes, cars etc. Of course the donut businesses is not the only way to make the so-called easy money, There are more ideas than I can even put in this one blog post. Bottom line is keep your mind open and stay out of debt. That can be a good thing, but as I previously said, do not use it to finance things you do not need. Saved debt to finance business ideas where you have a solid business plan and a way to get out of the business of necessary.

We have talked before in previous posts about trying different things in your donut business. Questions come up like should I sell coffee? Should I sell milk? Should I sell coffee? Should I sell orange juice? Each one of these has its disadvantages and advantages, just like selling anything else. You need to consider the overhead that each one will give you and the profit that each one could give you as well. You may, depending on the location, be better off just sticking to selling your doughnuts alone without anything else accompanying them. But there are situations where selling drinks could be beneficial.

I think we mentioned this before, we were in San Francisco on Pier 59 I believe (I'm not sure of the exact number) And there was a small doughnut shop on the Pier. It had been there a few years before and I assume that it is still there now. They seem to do very well, even though it was a slow time of year and the traffic was down. There were not a lot of people on that here, buying anything. But the little doughnuts shop had a steady flow of traffic buying their doughnuts. I thought it was very interesting, and that we had seen the doughnut shop before it was not until a year later that we had the idea to have one of our own. But one thing that we noticed is they did not sell any beverages except coffee. They sold a mini bag of doughnuts with about Half a dozen in each bag for three dollars. My partner and I absolutely loved them. Wow, it makes me want to go back to San Francisco, the two of us. We had such a good time, it really brings back good memories.

Anyway, back to trying different things in your donut business. If you have a stand-alone store and offer multiple varieties Of doughnuts, like the big chains, then of course it will be necessary for you to have drinks. He not only will have to have coffee, but you will probably have to have orange juice sodas and other drinks people enjoy in your area. By the same token if you have a large store then you probably won't need multiple varities of donuts. This is just not our business model, we are selling small doughnuts without drinks. Perhaps in the future we can offer a bigger menu. But for us this works out very well. Try different things in your donut business will be depend on your resources, venue and your audience, it is pretty much that simple.

I received a phone call from Rob Sturdy from Lil Orbits yesterday (Wed) regarding my questions about the donut making process with his company's products. I was impressed that he would take time to call me--you don't see that kind of follow up very often in the real business world. He mentioned that when making the donuts by hand with the applicator that they wouldn't come out in a perfect round shape, and the exercise should be used more for a taste test. I told him that we'd already discovered that and that it was a bit of a relief. I thought we were doing something wrong, and he said no probably not as far as the shape is concerned. Rob also confirmed what my partners and I were thinking. Making a small batch of donuts with a small amount of batter is much different than making a large number of donuts with a large amount of batter. Surface area of the batter matters due to evaporation as does the surface area of the heated grease for sufficient cooking with limited absorption. He said better, more consistent results are noted when using their large automated donut making machines. This makes sense to me. We'll be making more donuts this weekend using a new thermometer to control the grease temperature. I am interested to see if the the temperature wheel on the fry daddy is even close. I will blog about the experience later.

Opening a donut business can be very frustrating and time-consuming. Going at it alone can be intimidating and overwhelming. Although we have made the decision not to invest in a good franchise, we can see where it could be beneficial. The startup cost and net worth requirements are very high for a good donut franchise. Many times you can pool the resources of two or three people to adhere to the requirements of the donut franchise. These requirements can be very high at times.

One thing the doughnut franchise will give you is support and market research. They will also advertise your store and give you a budget for advertising. Of course they will take a royalty from your revenue, but that is the price of doing business. There are few businesses where I would recommend a franchise, but anything having to do with food, is not a terribly bad idea. Another thing that the doughnut franchise will give you his brand recognition. People will be familiar with the brand and will come into your store simply because they are familiar with the doughnuts that the brand sells. You'll be miles ahead of people getting to enjoy your doughnuts. You will not have to spend years of getting the word out about your brand, because it will pretty much already have been done for you. People are very particular when it comes to food, and if you have an established done that franchise to back to you, you'll be way ahead of the competition. The donut franchise will also give you good ideas on where to locate your doughnut business. They will have extensive experience on where to locate the doughnut shop. This experience can prove to be invaluable, and keep you from making big mistakes.

If you have the money to invest, and are financially fit, then the donut franchise model may be best for you. You'll need to look closely into each one, and decide which one best suits your situation. Some of the donut franchises will require a Hands on approach where others will let you simply be an investor. Again you will need to look closely and find out which one best suits your situation.

As promised, here are the answers to my questions sent to Lil Orbits.

Thanks for your interest in Lil Orbits - here are the answers to your questions -

1) The donut shortening is good for about 40+ hours of cooking time -
You will know when it is time to change it out - it starts a clear dark amber color and as you cook it will become darker - more opaque and brown. It will start to smoke and you may see a film on the top of the shortening - then it is time to change -

The temp. has to be 375 degrees - our machine controls the temp. the best that I know of - our shortenings - cube and liquid are vegetable shortening and blended to work well with our donut mix. Our mix and shortenings are Kosher Certified.

2) Water can effect the taste of the donuts - some water in communities are fine - some have a smell or taste that is poor. Some people have gone to bottled water so that no matter where they are the donuts taste the same. I would not used distilled -

3) We recommend that you allow the mix to set for 10 minutes - first batch of the day to set in the hopper so that it can get down around the cutter and any air bubbles will be gone. The batter in the hopper is good for a few hours but I recommend that you use it sooner than that. It does thicken a little but the cutter in the hopper handles it.

I believe that the temp of the donut fry and it's age have more to do with the taste of the donuts - 350 degrees, does not cook the outside to a crisp and allows too much fry to soak in. 400 degrees cooks the outside too fast and in order to get the middle of the donut cooked the outside gets too dark -

More questions - just ask -

Rob

Our third taste test did not go as well as the first two. We repeated the process for the specific purpose of filming everything for the blog thinking that what we had done previously would replicate. But it did not, and we were unsure why. When mixed according to the directions the batter was too runny and formed strings in the grease. Our solution was to add more mix to thicken the batter which worked. But did this change the texture or amount of grease absorbed? Unknown.
The donuts were easier to make in round shapes and actually looked donut-like today, but otherwise were inferior to what we'd made before. This was the third time the grease from Lil Orbits was used, and as expected after repeated use it turned darker. All grease does this so it was not unexpected, but we were unsure how the quality of the product would be affected. I also noted that when cooled, it took longer for the substance to solidify from a liquid back to its solid, partially hydrogenated state. Chemically, there had to have been a change between the three tests. The donuts that were produced were excessively greasy with a less fluffy interior.
Another change that could have affected the outcome was in the water content. The house where the donuts were made had a water softener installed between the first and second taste test. A change in water quality was noted by the owners in other areas.
Overall, we just were not as happy with what we made. If we'd gotten these donuts on our first taste test we might have just quit as it's doubtful that customers would have liked them after they bought them. One thing we had not done from the start was control exactly for the temperature of the grease. We failed to purchase a cooking thermometer and relied on the fry daddy temperature gauge which went in 50 degree increments. The directions called for a cooking temperature of 375 so we set the fry daddy wheel halfway between 350 and 400—logical yes but not necessarily accurate.
After the conslusion of the third test, we purchased more dry mix from Lil Orbits for further experimentation as well as some dry mix from a competing company. We'll also use the soy bean oil purchased from Sam's. I believe we can draw the same conclusions about how may time grease can be reused with donuts whether we use the Lil Orbits product or the Sam's product.
I am going to contact Lil Orbits to ask them some very specific questions about their product and the recommended process. My questions will be: Does is matter if soft water is used in the mixing of the batter? How often can the Lil Orbits grease be used before taste is affected and it needs to be discarded? How long can the batter sit before the consistency is affected and how can we keep this from happening without compromising the taste and texture? How critical is the cooking temperature? Are there any other variables that could affect the taste, texture, and absorption of grease? I will post the answers to my questions on this blog.

A lot of potential would-be business owners face the dilemma of starting out on their own on a daily basis. They know that they have a good product, doughnuts, but they are afraid that the slow economy will prohibit them from doing well in the donut business. They fear they will not be able to make it through the very difficult startup period When overhead is high and revenue is low.

The first thing you should do when starting a new business or thinking about starting a new donut business, save your money and get debt that you have currently paid off. If you are overrun with that and have no savings, when you experience bad times in your donut business, they will be amplified. If you are having difficulty making ends meet and have additional bills related to donut business venture You'll be in very bad state very quickly. If I don't give you any advice that you do not take, be advised that you need to have savings and most of your debt paid off before venturing out into having your own business. This becomes increasingly important when you have a family to support and only one income. If you do not do anything else before you start your done the business, get your debt paid and build your savings.

If you have enough money to live for two years saved, then you will have a very significant amount of money to help you when times are tough. Keep in mind you need to have enough money saved to pay your mortgage, utility bills, and any other debt that you may have. These bills have to be paid every month, you really do not have much of a choice.

The next thing you should do when contemplating starting a donut business, is setting up a timeline. You can use this timeline to set your goals of where you want to be and when. You can also use the timeline to develop a strategy for your donut business. Use the timeline to determine the amount of time you'll spend on developing and marketing the business. You will use it to plot times when you will work on the business. Do not set unrealistic goals, like working in the middle of the night if you do not have a history of doing something like that. Setting unrealistic goals when starting your donut business will only push you that much closer to failure. Be realistic and setting your goals And you will set yourself up for success in business.

Another thing you will want to do is analyze the opportunities you have in your area for setting up a donut business. Are there a lot of schools and churches that you could possibly sell your doughnuts to, maybe set up charity events to help push your doughnuts. The more people that taste your doughnuts, the better chance you have of people falling in love with them and wanting them. You want to make sure that there is a market for your business. How many people in your area are selling donuts? Have they been in business for very long? Do you have a unique donut recipe that you can share? Do you have a passion for what you are selling? All of these questions will get you closer to having a successful donut business and keeping you happy And a wave from your job.

You have an excellent donut recipe, You have a location and an audience to sell your too... and you are certain that they will sell very well. Now you just need to get equipment licensing and other things rolling in order to get your business started. Yet found a great place to get equipment, but you have found that it can be very expensive. If you do not have any money saved but you are financially secure, i.e. you have enough money to make ends meet. Then he may want to get the capital to run your donut business from other sources.

Do you have good or decent credit? If so, then you may be able to get a small business loan from your local bank. Local banks are usually easier to deal with than big banks that just look at numbers. Credit unions are excellent places to get loans for $10,000 or less. If possible attempt to get a loan at a bank that you frequent often. You may be surprised how easy it is. They will want to know what the money is for of course and what you intend on doing with it. This will help you get the necessary capital that is required to get your business venture up and running.

If getting a loan from a bank or credit union is not an option, Have you considered borrowing the money from a family member? Maybe you can borrow the money from a close friend who could possibly be a business partner? We explained the differences between a business partner and a venture capitalist and a previous post. But to summarize, when someone invests (capital) in your company they will have little control over the day-to-day operations of the business. It is simply your responsibility to pay the loan off when you start to make money, or whatever arrangement that you may have with the venture capitalists. Having a business partner can be a sticky situation if you are not careful. The business partner in your donut business could be difficult to work with or have different ideas on how things should be handled. As previously mentioned you can pay a higher rate on the loan than giving 50% of the company to someone who will not be actively involved in it. Be very careful about taking money from people and the contracts that you sign.

The business partner model has worked for us and our situation, but it may not for you. Assess your needs and what everyone brings to the table before you make a decision. This lone decision Could mean the success or failure of your venture. Not to mention the overall happiness that you will have our not have by going into the doughnut business.